Tech leaders need to focus on strengths and outsource everything else

May 2017

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Technology entrepreneurs tend to wear a number of hats, especially when starting a new business or managing high growth. They’re expected to be the visionary, designer, developer, marketer, salesperson and accountant bundled into one. Is this the most effective and efficient use of their time? 

In his book The 4-Hour Workweek, Timothy Ferriss strongly encourages entrepreneurs to focus on their strengths and to outsource everything else – from professional to personal tasks. Not only will they have more time to focus on their key competencies, they’ll also avoid making mistakes in a field where they have little or no experience. 

BDO’s National Financial Services Leader Sam Khoury echoes this sentiment and says when deciding which functions to outsource, technology entrepreneurs and businesses should look at some of their most time consuming, non-client facing activities as a starting point. During this phase, Khoury says it’s important to take a methodical approach to ensure the right decisions are made. Outsourcing the right functions can free up valuable time that will allow entrepreneurs to return their focus to building the business and growing their market share. If the wrong decisions are made, however, it can put an organization at a disadvantage, as they don’t want to outsource or lose any proprietary information. 

One viable function to consider outsourcing is bookkeeping and accounting services. Not only is it an administrative burden, when it’s performed by inexperienced individuals, it can create a number of undesirable consequences including late filings, late invoicing, missed expenses, and worse, prevent the business from establishing a “scorecard.” Mike Stranz, BDO’s National Outsourcing Leader, warns that without the insights offered by a scorecard, cash burn becomes a dangerous estimate, and actual ROI on activities is not really measurable, forcing management to make decisions in the dark. 

The following bookkeeping and accounting checklist can help you determine if you need help with your back office operations:

  • You have penalties and interest with HST and payroll
  • Your month-end close take longer than 2 weeks
  • You’re not getting reports to drive the business forward
  • You don’t have the resources to hire a full-time staff member
  • Your accountant sends end of year reports with a lot of journal entries

Outsourcing to service providers who can perform these functions thoroughly, efficiently and cost-effectively will help technology entrepreneurs leverage their professional expertise and resources:

  • Knowledgeable and experienced team: Outsourced service providers stay up to date on the latest regulatory requirements, and can leverage this expertise and industry knowledge to convert data into meaningful insights. 
  • The latest technology: Choosing a service provider that constantly upgrade their systems will ensure that you access the most up to date technology as a client.
  • Scalability and sustainability: Using an outsourced service provider will give ensure your business is staffed with the right number of staff regardless of seasonality or growth. Having access to a scalable team also helps mitigate disruptions due to illness or vacation.
  • Cost-effectiveness: Service providers have a full team that enables them to assign the right person to the right task. At smaller accountancies, senior staff work on all aspects, driving costs up. 
  • Business growth: By leveraging the expertise of the service provider, you’ll have more free time and will be able to return your focus to value creation.

BDO provides professional bookkeeping and accounting services that can benefit technology entrepreneurs and businesses of all sizes in a number of ways. Contact us for a quote and to find out more about the benefits gained from outsourcing your accounting and bookkeeping services to BDO.